I want to make something clear. It is absolutely, unarguably inevitable that the dollar will lose its status as the world’s reserve currency….someday.

This is not a condemnation of US policy or a prognostication of doom. It is just inevitable. Nothing lasts forever. Not even our planet.

When the US dollar will lose its dominant status is much more debatable. Is it going to happen six months from now!!!! or will it take 1,000 years?

Don’t fret over global growth

When discussing the US dollar losing its status as the world’s reserve currency there tends to be two camps. One camp says it will virtually never happen, and the other is freaked out that it will happen any day now. Neither camp is correct. It will happen, but it will probably take a long time, perhaps several hundred years, and it doesn’t necessarily mean anything bad will happen to the US. Just because other countries have economic growth and achieve stability doesn’t mean our standard of living must go down to accommodate. Has Britain’s global dominance declined since 1902? Yes. Is the standard of living in Britain much better now than it was in 1902? Absolutely. I happen to like having my polio vaccine.

Long term, a better global economy is better for everyone.

What is important long term

A currency is just a medium of exchange. The productivity and activity of an economy are much more important. Here is another good post on the topic.

When families are investing for multiple generations, it is critical that they keep their eye on the long term prize of a more productive global economy. Distractions like “freak outs” over the status of currencies only serve to derail good long-term plans.